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SECP notifies CFS rules

KARACHI (December 08 2005): The Securities and Exchange Commission of Pakistan (SECP) has notified the regulation to start continuous funding system (CFS) on real time basis and new mechanism for lower circuit breakers.

According to the new system, trading in scrips registering 5 percent decline would be halted in coming sessions. This would be done to control the sudden plunge in share prices, and trading would be halted in that particular scrip for approximately 30 minutes.

If trading reopens after 30 minutes and the scrip again shows 5 percent decline, the trading in that scrip will be stopped for the rest of the day.

On the second day, trading will halt if the scrip falls by 10 percent in value for a cool-off period and in case the scrip drops by another 10 percent, the scrip will then be traded on SPOT rate, allowing the investor to sell off his holdings.

The continuous funding system would start from Thursday on real time basis and the regulator has accepted the demand of the Karachi Stock Exchange (KSE) allowing them half an hour extra to settle the CFS.

Moreover, the SECP, from December 19 would allow stock brokers one more hour to finalise deals under the CFS counter.

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